Iceland under fire over loan restriction

The Icelandic Government is facing a legal challenge to its restrictive student loans regulations.

The European Free Trade Area (EFTA) Surveillance Authority considers that the rules break European Union freedom-of- movement rules. These have to be applied in Iceland for EU and EFTA members because Iceland is in the European Economic Area (EEA), where many EU laws apply.

Icelandic legislation applies stringent criteria to applicants for student loans who are planning to work while studying or to attend courses directly related to a previous profession. They must be resident in Iceland and have lived there two years ahead of their application, or three out of the previous ten years.

The surveillance authority has based its threatened legal action on its view that the residence requirements indirectly discriminate against migrant workers and their dependent family members.

The authority said: "Even if the residence requirements apply to Icelandic nationals also they are indirectly discriminatory because, in practice, they are more easily met by Icelandic nationals than by nationals of other EEA states." This includes all EU citizens.

Iceland government lawyer Valur Arnason said that ministers were considering whether to fight the case or to liberalise their regulations.

But he warned about the effect on Iceland if there were a free-for-all.

EFTA court rulings are binding precedents in the EU.

At present, the UK does not impose residence requirements on "migrant worker" students who want to secure British student loans.

Already registered?

Sign in now if you are already registered or a current subscriber. Or subscribe for unrestricted access to our digital editions and iPad and iPhone app.

Register to continue  

You've enjoyed reading five THE articles this month. Register now to get five more, or subscribe for unrestricted access.

Most Commented

  • Woman taking homeopathic medicine

Alternative treatments in healthcare plan is latest in a series of homeopathy-related controversies

  • Man lying beneath rugby pile-up

Six academics share their experiences before delivering a verdict on the system

  • Zygmunt Bauman with hand over mouth

Eminent sociologist has recycled 90,000 words of material across a dozen books, claims paper

  • Foot about to step on banana peel

Kevin Haggerty and Aaron Doyle offer tips on making postgraduate study even tougher (which students could also use to avoid pitfalls if they prefer)

Phil Baty explains why hundreds of research papers will not be considered when compiling the next Times Higher Education rankings